Most visitors to Portugal head for the beaches and high rise hotels of the Algarve, but I'd vote for renting a car, heading north to the perched medieval hilltowns and staying in pousadas. Spain has its paradores, Portugal its pousadas--monasteries, castles and other historic buildings converted into charming small hotels with modern amenities. Travel doesn't get more romantic than this.
Among my favorite towns? Sintra, Obidos (the most perfectly preserved medieval 13th-century village in central Portugal), Evora and Tomar. Favorite pousadas include Pousada de Sao Filipe in Setubal; Pousada de Castelo in Obidos, Pousada de Santa Luzia in Elvas, Pousada de Rainha Santa Isabel in Estramoz and Pousada dos Loios in Evora.
For more information, pick up the recently released Frommer's Portugal, 17th Edition, or contact the Portuguese National Tourist Office at tel. 212/354-4403 or www.portugal.org, or www.portugal-insite.pt. Or for pousada reservations, try calling Marketing Ahead, tel. 212/686-9213; online at www.marketingahead.com/pousadas.html.